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Will North Dakota corn wet milling plant give the region's farm economy a boost?

Greg Amundson, a Gilby, North Dakota farmer and North Dakota Corn Growers Association board member, said he is “cautiously optimistic” about the Fufeng Group Ltd. plant, but doesn’t know enough about to advocate for it.

Corn
A western Grand Forks County, North Dakota, farmer harvests corn in October 2021.
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GRAND FORKS, North Dakota — The Fufeng Group Ltd. wet corn milling plant proposed in Grand Forks has potential to benefit the region’s agricultural industry, but whether that happens depends on the answers to an abundance of yet-unanswered questions.

In November 2021, Fufeng Group Ltd., a Chinese-based bio-fermentation company, chose Grand Forks from among four U.S. locations that were finalist for locations to build a wet milling corn plant that would initially have capacity to process 25 millions bushels of corn annually.

The wet corn milling processing plant, which is proposed to be located on a 370-acre site in northwest Grand Forks, primarily would manufacture food additives, animal feed and other products, according to Keith Lund, Grand Forks Region Economic Development president and CEO. The plant’s finished products would be the amino acids lysine and threonine, which are an essential ingredient in animal nutrition formulas.

Greg Amundson, a Gilby, North Dakota farmer and North Dakota Corn Growers Association board member, said he is “cautiously optimistic” about the Fufeng Group Ltd. plant, but doesn’t know enough about to advocate for it.

While the plant has potential to offer a great opportunity for farmers to market corn, at the same time, Amundson doesn’t want it to have a negative impact on local farmer-owned cooperatives. It has not been clarified what kind of relationship, if any, Fufeng Group Ltd, will have with grain elevators, where many local farmers traditionally have marketed their corn.

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It also is not clear what the specifications will be for the quality of corn the company would buy, Amundson said.

Meanwhile, Amundson doesn’t believe that the presence of the Fufeng Group Ltd. plant would appreciably boost the per-bushel price of corn to farmers. He predicts that farmers would see a 20-to 30-cent per bushel increase, similar to the increase farmers who sell wheat the North Dakota Mill and Elevator receive when they sell their crop.

“Honestly, I don’t think it will add a lot,” Amundson said.

The North Dakota Corn Growers Association, an organization that represents growers, for the time being is not promoting the Fufeng Group Ltd. plant because there isn’t enough information available, he said.

“As of now, we’re just kind of sitting back, seeing what has developed,” he said

U.S. employees of Fufeng Group Ltd., including Eric Chutarash, chief operations office, have not provided any details about the project, referring media questions to Grand Forks Regional Economic Development. Meanwhile, the company has not provided any telephone numbers for its U.S. employees to the public or to the media, and they are not available via online searches for contact information.

An Agweek reporter on Jan. 13 sent Chutarash a list of 10 agriculture-related questions, including whether the Fufeng Group Ltd.'s proposed Grand Forks plant would market its products in the U.S. or export them, what rail company will serve Fufeng and how that company will ensure that it will have the cars available for transporting corn in and products out, and where the plant will source the corn. Chutarash had not responded as of the afternoon of Tuesday, Jan. 18.

The Fufeng Group Ltd. wet corn milling plant, if built, would be the second in North Dakota. The other is ProGold near Wahpeton, North Dakota. The Wahpeton plant has an annual processing capacity of about 30 million bushels.

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Cargill leases and operates the ProGold plant, which is owned by Golden Growers Cooperative and American Crystal Sugar Co. Golden Growers own a 49% share in the plant and American Crystal Sugar Co. owns a 51% share.

Besides North Dakota, there were 24 other corn wet milling plants in the United States in 2019 including one in Minnesota, according to the Corn Refiners Association, a national organization representing wet milling manufacturing companies. Other states with plants are Nebraska, Iowa, Illinois, Indiana, Ohio, Missouri , Tennessee and North Carolina.

Two cities in Nebraska and one in Iowa were the other two finalists for the Fufeng Group Ltd. plant, Lund said. Grand Forks was chosen because of the aggressive work the city and economic development did to attract the plant, the opportunity to tap into a natural gas pipeline originating in the Bakken oil fields and the large amount of corn grown in the Grand Forks region.

While there is not much information available about agricultural-related specifics, some details about the plant’s development and cost have been made public.

The total cost to the city of Grand Forks for infrastructure to put in place, including site access, utility and road improvements, for the proposed plant would be between $85.5 million and $104.7 million, Lund said.

Grand Forks has a tentative agreement with Fufeng Group Ltd. to provide a 90% tax break for the company in its first year and 75% in the next 10.

The plant, when operational, would employ 223 people directly and has potential to employ an additional 525 people, Lund said.

Documents outlining the city’s negotiated relationship with the city of Grand Forks are expected to be released soon. Next month, a public hearing about the plant is planned.

Ann is a journalism veteran with nearly 40 years of reporting and editing experiences on a variety of topics including agriculture and business. Story ideas or questions can be sent to Ann by email at: abailey@agweek.com or phone at: 218-779-8093.
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